Price differentials of moon cakes before and after before and after Mid-Autumn Festival in Hong Kong Group members: Jasmine Chan (2) Kennes Hung (5) Elain Tsang (25) Renee Angeline Yeh (32) Dorothy Yung (34)

Moon cakes Moon cakes are Chinese pastries traditionally eaten during the Mid-Autumn Festival The festival is for lunar worship and moon watching; moon cakes are regarded as an indispensable delicacy on this occasion Moon cakes are offered between friends or on family gatherings while celebrating the festival, one of the three most important Chinese festivals

Price Differentials September 20 or before $175 September 27 or before $200 % increase: 12.5 % During Mid-Autumn: Moon cake is an inelastic good (Everyone needs it to celebrate the festival and it is expensive) After Mid-Autumn: Moon cake is an elastic good (The festival is over and the price is relatively low)

Demand and Supply curves During Mid-Autumn Mooncake P Q/T D1D1 D2D2 S1S1 S2S2 P1P1 P2P2 Q1Q1 Q2Q

Demand and Supply During Mid-Autumn When Mid-autumn festival approaches, people’s demand for moon cakes increases. The demand curve moves from D 1 to D 2 As so many people want to buy moon cakes, more moon cakes are produced. The supply curve moves from S 1 to S 2 The price increases from P 1 to P 2 The quantity increases from Q 1 to Q 2 The total revenue therefore increases

Demand and Supply curves After Mid-Autumn Mooncake P Q/T D2D2 D1D1 S P2P2 P1P1 Q1Q1 Q2Q2 doesn't evoke the same festive feeling but there's a mooncake in there nonetheless.

Demand and Supply After Mid-Autumn After people’s demand for moon cakes decreases. The demand curve moves from D 1 to D 2 As people don’t want to buy moon cakes anymore, the supply doesn’t increase Price decreases from P 1 to P 2 The quantity decreases from Q 1 to Q 2 The total revenue therefore decreases

Different Ownerships Private Ownership (Private Limited Company) Wing Wah Features: The company raises capital from existing shareholders Need not to disclose financial statements to the public Shares can be transferred with the consent of other shareholders The shareholders are usually directly involved in running the business Private Ownership (Public Limited Company) Maxim Features: The company raises capital by issuing shares and bonds Need to disclose financial statements to the public Shares can be quoted and traded in the stock exchange market The shareholders are responsible for bearing risk

Ourquestionnaire!!

We gave out 30 questionnaires 30 people said that they would buy moon cake before mid autumn festival Only 4 people said that they would also buy moon cake after mid autumn festival SURVEY RESULT

26 People said that moon cake was only for festival celebration while the other 4 said that it wasn’t Only 24 people said that they love eating moon cake 14 people loves eating the traditional moon cake. 12 people loves eating ice-skinny moon cake. Only 4 people loves eating ice-cream moon cake

26 people said that they will still purchases the moon cake if it is expensive 18 people said that the flavors will change their mind in choosing the other brands of moon cake. 10 people said that the prices will change their mind. While 2 people said that the brand will change their mind SURVEY RESULT

SURVEY ANALYSIS Moon cake is a festival good The degree of necessity of moon cake is very high Therefore it is an inelastic good Almost everyone needs to celebrate the festival with this traditional good due to their traditional habit

SURVEY ANALYSIS Whatever the price rise, people will still buy it Different kinds of moon cakes have different price which depends on human desire For some ice skinny moon cake and ice cream moon cake: they will will be more expensive However, people are not really concerned much about the prices, but they care about the flavors of the moon cake

Conclusion Moon cakes become higher in price during and before Mid-Autumn, but then become cheap again when demand becomes lower Thus, they follow perfectly the law of demand

Our Feelings This situation is just the normal feature in a capitalist society Businesses, such as moon cake makers, aim to make the most profit So, if they change their prices according to demand, they can maximize their gain

References tmlwww.maxims.com.hk/mooncake/chi/index.h tml Magazine

THE END